. /.   WORLD TRADE  
ORGANIZATION  TN/RL/GEN/121/Rev.1 
6 June 2006 
 
 (06-2672) 
Negotiating Group on Rules 
 Original:   English 
 
 
THREAT OF MATERIAL INJURY 
 
Communication from Egypt  
 
Revision  
 
 The following communication, dated 1 June 2006, is being circulated at the request of the 
Delegation of Egypt 
 
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 This proposal constitutes a further reflecti on of the proposal (TN/RL/GEN/121) concerning 
the concept of “ threat of material injury ”. 
 
 The discussions of the Negotiating Group on Rules, at its last meeting, confirmed Egypt in 
considering that Article 3.7 of the Anti-Dumping Agreement must be improved in order to provide 
investigating authorities and interested parties with additional guidance when assessing threat of 
material injury.  The revisions/additions to the proposal submitted earlier,  which are highlighted 
below, are intended to address the comments and concerns expressed by some Members: 
 
- Egypt had proposed to insert a reference to the factors listed in Article 3.4 in a new 
subparagraph (v) to Article 3.7.  Since the fact ors listed in Article 3.4, unlike those listed in 
Article 3.7, refer to the “ relevant factors and indices having a bearing on the state of the 
[domestic] industry ”, in order to distinguish the two types of factors that would have to be 
examined under Article 3.7, it is proposed to in sert the reference to Article 3.4 factors under a 
sub-paragraph (a) and the existing Article  3.7 factors under a sub-paragraph (b); 
 - All the factors that are listed under Article 3.4 may not provide useful indications on the 
impact of dumped imports on the state of a domestic industry threatened to suffer from material injury.  Consequently, only those econo mic factors and indices that are pertinent for 
threat of material injury determinations shoul d be examined under Article 3.7.  The insertion 
of a reference to the factors listed in 3.4 w ould not require a prospective analysis of these 
factors.  Only those factors providing an indication of the current state of a domestic industry threatened by material injury should be examined; 
 
- The determination “ of the availability of other markets to absorb any additional exports ” 
under the current sub-heading (ii) of Article 3.7 is often difficult to established for the 
domestic industry and for investigating authorities.   Indeed, it is difficult to have access to the 
possible absorption capacity of other markets. In order to ensure that investigating authorities 
are not required to engage in a complex – when not impossible – fact-finding exercise, it is submitted that only the known availability of ot her markets to absorb any additional exports 
should be taken into consideration.  Also, the absorbability of other export markets should 
only be considered when based on f acts and not on mere allegations.  TN/RL/GEN/121/Rev.1 
Page 2  
 
   
Proposed Changes in Article 3.7 
 
 In view of the above, it is proposed to ame nd Article 3.7 of the Anti-Dumping Agreement as 
follows: 
 
A determination of a threat of material inju ry shall be based on facts and not merely on 
allegation, conjecture or remote possibility.  The change in circumstances which would create 
a situation in which the dumping would cause injury must be clearly foreseen and imminent.
10  
In making a determination regarding the existe nce of a threat of material injury, the 
authorities should consider, inter alia , such factors as: 
 
(a) any of the relevant factors listed in Article 3.4; and  
 
(b) (i) a significant rate of increase of dumped imports into the domestic market 
indicating the likelihood of subs tantially increased importation; 
 
(ii) sufficient freely disposable, or an immi nent, substantial increase in, capacity 
of the exporter indicating the likeli hood of substantia lly increased dumped 
exports to the importing Member's market, taking into account the known and 
established  availability of other export markets to absorb any additional 
exports;  
 
(iii) whether imports are entering at prices that will have a significant depressing 
or suppressing effect on domestic pr ices, and would likely increase demand 
for further imports;  and  
 
(iv) inventories of the product being investigated. 
 
No one of these factors by itself can necessarily give decisive guidance but the totality of the factors considered must lead to the conclusi on that further dumped exports are imminent and 
that, unless protective action is taken,  material injury would occur. 
 
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10 One example, though not an  exclusive one, is that there is convincing reason to believe that there will 
be, in the near future, substantially increased importation of the product at dumped prices.